What will happen to Bitcoin Network if the internet shuts down?

[SatoPrincess]

While it’s almost impossible for the Internet to shut down globally, a country can decide to isolate themselves from the rest of the world. Hypothetical, if country Z decides to shut down the internet in their country, and w Their own Internet because of polictical differences/war.  Will there a disruption in the Bitcoin Network?  How does this affect miners?Because I'm thinking there could be some sort of break in the Blockchain forming two networks or is it possible for the nodes to still communicate with the outside world?

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[pooya87]

- One country shutting down its own connection to the rest of the world:
The effects on bitcoin network depends on how much of bitcoin hashrate is in that country. So far no country has ever owned a significant enough hashrate that could significantly disrupt the network, in other words hashrate is distributed well enough that it is not going to be a serious issue.
But if something like 51% of the hashrate was in one country that then cuts itself off from the rest of the world, the miners could continue mining bitcoin in that isolated place and have the longest chain in which case by current existing consensus rules that becomes the correct chain and the rest of the world would be on a fork that should be discarded if the connection to that isolated country is back.
But realistically miners would relocate or find a way to connect to the rest of the world and even more realistically no country owns 51% of hashrate to begin with.

- Internet of the whole world "shuts down"
We have more serious things to worry about than what happens to bitcoin!
But a handful of developed countries have ways to not rely on the "internet" and still have a "domestic internet network". I don't know what the network is called but for example where I live the banking system, all servers located inside the country, ... can still continue to function without "internet".
In this case, the nodes inside that network would continue connecting to each other and miners inside that network continue building on their own isolated chains,... and we get a bunch of these small isolated chains.
Later if  the connection comes back, based on current consensus rules we all follow the longest chain (with the most work).

* Note that I use "current consensus rules" because in case of an unpredictable event, some drastic measures have to be taken. So we can't really predict what would happen to bitcoin in a scenario that is very unlikely and as I said more serious concerns would be present.

[Hyphen(-)]

As long as is not the entire world that is shut down, the bitcoin network will keep running. China did it last year and force their miners to shut down their part of machines and we saw a significant drop in hashing power, the only problem I fear when few miners from a particular location take over bitcoin is 51% attack and monopoly of the bitcoin network.
We have some nodes in space but very few, like the Blockstream satellite receiver, has the verify and also propagate transactions. Bitcoin network can be restricted in some location but not worldwide and as long as others are running, there will be nothing like split of network.

[kaggie]

Short term isn't an issue, other than the short term inconveniences, and crash of many different markets.
Bitcoin would be ok in market terms immediately because no one would have had the ability to sell it.
After the internet came online, bitcoin would fall with the rest of the market based off of market fears.
The bitcoin network would correct itself immediately with the longest proof of work.  
There might be issues if there is longer than two hours between miner's clock though..... but even then, the longest chain wins.

But, like shut down for a long term?

- One country shutting down its own connection to the rest of the world

As pooya says, there would be a leak of data somewhere, so this would be pretty unlikely, but I imagine a few things could happen:

Both groups continue on as normal. Two forks.

The smaller group might keep track of all transactions (meaning, more than what's in the blockchain but the messages that are sent to be put into blockchain) for when the groups join up again. However, the smaller group of countries would soon implement a hard fork with a small change to invalidate the larger group's proof of work to not lose their transaction history when they join up again. The groups could continue isolated for decades. The much smaller group would have an incentive to force their own currencies and block all transactions that didn't originate during their isolation to not be blown out of the water when the groups join up again. It would be a separate coin for them.

If people in the smaller group were also clever enough, they could keep the keys to all of their transactions to be used twice: in their fork, and in the larger group. The larger group continues with mining power and use, but the smaller group despite their lack of mining power has effectively older addresses and keys. They can still transact on the longer, larger group's chain without their new-isolation transaction data having been saved on it. So, the smaller group would suffer short term but would have some benefit later on that could balance out. The larger group wants to maintain mining power so that they don't lose their transaction history, and because they are larger, they can't determine which transactions are only from the smaller group.

These separate pressures between the two groups could force them to reconcile sooner.

-
[warning! muddled paragraph:]
For the armaggedon scenario, which is more unlikely, you already have worse things to worry about, so let's ignore that. When the internet came back online again after .. months? years? decades?, people would want to have a unit of accounting that they could agree on but didn't have to agree on. Enter bitcoin. If the internet was being restored very slowly, you could start anew with the mining process and new genesis block, which would work to rejoin a global market. It depends then though whether the people who had mining rigs were trusted enough to be given the most amount of control over the currency. If miners were trusted enough and it was a slow recovery, then mining would start instead with new genesis and not the current database. If miners weren't trusted, the old database would suffice on the premise of it being reasonably distributed globally. Not perfect, but probably better than whatever other markets that were now valueless. It would be simplest to use the currently distributed database of values globally because no one would agree with simply giving everyone a baseline amount, because I don't think distribution is possible to do again without manipulation. You'd probably have a lot of alt coins enter the discussion too.

[BlackHatCoiner]

Bitcoin would be ok in market terms immediately because no one would have had the ability to sell it.

That's true if the apocalypse happened immediately for everyone. But, if it started from an EU country, few hours later to Russia, the next day to China etc., I can guarantee that most of the US residents who owned Bitcoin would have sold it.

If the internet was being restored very slowly, you could start anew with the mining process and new genesis block, which would work to rejoin the global market.

I don't understand. Why would you need to restart the chain with a different mining process? Why shouldn't you use the already existent Bitcoin? Your last paragraph is a little muddled.

[NeuroticFish]

While it’s almost impossible for the Internet to shut down globally, a country can decide to isolate themselves from the rest of the world. Hypothetical, if country Z decides to shut down the internet in their country, and w Their own Internet because of polictical differences/war.  Will there a disruption in the Bitcoin Network?

* This was discussed not too long ago; not sure if it was related to the war, probably not, possibly the discussion was from before the war.

The usual scenario is the internet blocked, not shut down.
If a large area remains out of the global internet completely (which is difficult, keep in mind that one bitcoin node that can connect the two "worlds" is enough to keep everything still OK), there will be one problem: slower blocks until the difficulty is recalculated (every 2016 blocks).

How does this affect miners? Because I'm thinking there could be some sort of break in the Blockchain forming two networks or is it possible for the nodes to still communicate with the outside world?

If the difficulty retargeting is far away, for the area with the smaller number of miners it will be the most difficult, since the difficulty will be extremely high, it won't be easy to hit blocks. But it will actually be more difficult for both, proportionally with the hash rate "lost" to "the other side".
When the rejoin will happen there are 2 options:
* the consensus rule will apply and the shortest chain (probably the one from the area with less miners) will become invalid/will disappear
* during the "blackout" at least one of the sides has implemented something to make the chain of that part of the world a hard fork; then we'll have two different bitcoin (like we have now BTC and BCH, for example)

[kaggie]

That's true if the apocalypse happened immediately for everyone. But, if it started from an EU country, few hours later to Russia, the next day to China etc., I can guarantee that most of the US residents who owned Bitcoin would have sold it.

Ooo, good point. Considering armaggedon scenarios can be any possible thing, it's all a bit hand-wavey. You have the better point here.
 
The sanctioned country discussion is easier to deal with, and most practical.

If the internet was being restored very slowly, you could start anew with the mining process and new genesis block, which would work to rejoin the global market.

I don't understand. Why would you need to restart the chain with a different mining process? Why shouldn't you use the already existent Bitcoin? Your last paragraph is a little muddled.

I should have warned that it was a muddled paragraph. I don't feel like rewriting it either. I'll mark with a warning.
It's too many different possibilities and would make for a better novel than discussion.

Both a new chain+mining or the extant chain are legitimate possibilities to restart a currency by giving pseudo-fairness, with the better choice dependent on the exact situation. You might want to do a new chain and mining process if all previous owners were long gone, all keys were lost, or if no one had computers except miners. But again, it's a better novel than discussion that could use the setup from a narrative.

[dkbit98]

It's not impossible for internet to be shut down globally, especially in this crazy times we live now, and some countries even have internet kill switch (confirmed for United States).
Global disruption in electrical grid system and power outage would affect Bitcoin network and everything else that uses internet, even if it doesn't happen in all countries it would still create major problems for blockchain sync and transaction confirmation.
I don't see likely scenario that only bitcoin network gets affected, but I see very possible scenario of some global event that would indirectly affect Bitcoin as well, but this would be temporary.
I scenario like this, you should ask yourself what else ould be affected by internet not working, or being separated locally by countries... no international payments of any kind, no emails, etc.

[Synchronice]

pooya87a & dkbit98 gave you great answers but I can't look at this task in frames because bitcoin is the part of the cyber world where everything is connected to each other like ∞. Why do I think so? Because the real world is a great example to make a parallel. This question in the real world would look like this: What Happens If Bees Go Extinct? What Happens If Lions & Tigers Go Extinct? Removing one "unimportant" species can seriously affect our ecosystem but removing the keystone species can collapse the entire ecosystem.

It depends on the country and its role in the global ecosystem.
What if Guatemala decides to shut down the internet? It will be bad but nothing significant happens because they aren't major players in the world, not in economics, not in bitcoin mining, etc.

What if the USA decides to shut down the internet? This is the real question! The USA's economy will collapse, there will be modern/fast communication problems, no more flight/apartment booking, no more online entertainment, no more access to your online bank and card payments, and the other countries will have problems for a long time because the headquarters of companies like Amazon, Facebook & Google is located in the USA. Millions of software/web developers, IT specialists, project managers and other types of employees will immediately be unemployed in their country. Because of this, there can be a migration crisis and the job market in other countries will be very, very competitive which will very negatively affect other citizens.

After this, who cares about Bitcoin? And now imagine, the USA is a top bitcoin miner, it's really impossible to say what will happen to bitcoin when all the other problems mix with each other.

[NeuroticFish]

What if the USA decides to shut down the internet? This is the real question!
[~snip~]
And now imagine, the USA is a top bitcoin miner

You're pretty much spot on.
This discussion about internet cut off did initially come off with the scenario of China, Russia or Kazakhstan getting cut off. Yes, I know, officially China is no longer mining. Still, the discussion is pretty much the same.
Just USA will most probably not get cut off alone. A much more plausible scenario can be "western economies" (and their circle of influence) cut off from Russia + China + whoever is under their circle of influence.

When mining was a thing I China, this could have been one of the dangers, but now it's no longer such a scary possibility.

[DannyHamilton]

Hypothetical, if country Z decides to shut down the internet in their country, and w Their own Internet because of polictical differences/war.  Will there a disruption in the Bitcoin Network?  How does this affect miners?

Asked and answered long ago:

It's hard to imagine the Internet getting segmented airtight.  It would have to be a country deliberately and totally cutting itself off from the rest of the world.

Any node with access to both sides would automatically flow the block chain over, such as someone getting around the blockade with a dial-up modem or sat-phone.  It would only take one node to do it.  Anyone who wants to keep doing business would be motivated.

If the network is segmented and then recombines, any transactions in the shorter fork that were not also in the longer fork are released into the transaction pool again and are eligible to get into future blocks.  Their number of confirmations would start over.

If anyone took advantage of the segmentation to double-spend, such that there are different spends of the same money on each side, then the double-spends in the shorter fork lose out and go to 0/unconfirmed and stay that way.

It wouldn't be easy to take advantage of the segmentation to double-spend.  If it's impossible to communicate from one side to the other, how are you going to put a spend on each side?  If there is a way, then probably someone else is also using it to flow the block chain over.

You would usually know whether you're in the smaller segment.  For example, if your country cuts itself off from the rest of the world, the rest of the world is the larger segment.  If you're in the smaller segment, you should assume nothing is confirmed.